Favor Economy
The informal system of exchanging favors and assistance that underlies professional networks.
Also known as: Favor bank, Help economy, Social credit system
Category: Concepts
Tags: reciprocity, networking, relationships, social-capital, careers
Explanation
The favor economy is the informal system of exchanging favors, assistance, and support that underlies professional and social networks. Unlike formal economies with explicit prices, favor economies operate through: implicit obligations, social capital accumulation, and network-based exchange. Success in the favor economy requires: building credit (doing favors), maintaining reputation (being reliable), and network positioning (knowing people who can help). The economy functions because: people prefer helping those who helped them, reputation information spreads, and being known as helpful creates opportunities. Key dynamics include: favor banking (accumulating credits), favor calling (asking for help), and favor matching (reciprocal relationships). Effective participation means: being generous without keeping explicit score, asking for help appropriately, and being a connector (introducing people who can help each other). Risks include: over-extraction (damaging reputation), under-utilization (not asking for help), and transactional mindset (treating relationships as transactions). For knowledge workers, the favor economy means: contributing to communities, asking for help when needed, and building genuine relationships rather than extracting maximum value.
Related Concepts
← Back to all concepts